McNeil Consumer to make marketing splash as OTC brands return to market

By Michael Johnsen

NEW BRUNSWICK, N.J. — Johnson & Johnson is preparing to turn the corner with its McNeil Consumer Healthcare business, J&J chairman and CEO William Weldon told analysts during the company's fourth-quarter earnings call Tuesday. That over-the-counter business generated $5.2 billion in the United States for the year ended Jan. 2, representing a 6.7% decline as compared to 2010.

"A big part of our consumer story in 2011 and going into 2012 has been the recovery and remediation of McNeil Consumer Healthcare business," Weldon said. "We've achieved all major commitments to date under our consent decree with the [Food and Drug Administration] and are working closely with FDA officials to ensure we can get high-quality products back to our loyal customers who need them." Several key products already have returned to the market, Weldon said, including Tylenol Severe Cold caplets and certain children's and infants' Tylenol brands. In addition, McNeil introduced a flow-restrictor packaging across its children's medicines to help reduce dosing errors. "We will continue to invest in market support as we deliver a steady supply of our OTC brands back into the market."

Weldon noted, however, that reclaiming lost marketshare across its OTC franchises will be an uphill battle. "It will be a while until we reclaim the share," he said. "What we're doing is getting them out as quickly as we can and what we're getting in the market is selling. I think by the middle of 2012, we'll have most of the products that are going to put back in the market — definitely by the end of 2012."

Worldwide, Weldon noted that J&J is still the sixth largest consumer healthcare company, with $14.9 billion in total sales, up 2% overall. "For [our consumer segment], we saw an operational sales decline of just under 1%, given the remediation and supply issues associated with our U.S. OTC business," Weldon said. "Our consumer business saw solid growth in certain franchises like skin care and oral care, with strong performances from the Neutrogena and Listerine mouthwash brands. … We also continued to innovate, introducing Neutrogena Naturals, Aveeno Smart Essentials, Nicorette Quick Mist and Listerine Zero." The Nicorette Quick Mist is a smoking-cessation mouthspray launched last year in the United Kingdom — GlaxoSmithKline holds the license on the Nicorette brand in the United States — that is marketed as a "fast-acting, flexible and designed for life on-the-go" smoking-cessation solution.